Tuesday, June 22, 2010

Today's Interim managers offer good value

A recent report by the Management Consultancy Association claims that while consultants provide specialist skills not available internally, contractors and interim managers simply replace full-time staff "at an inflated price".

This criticism comes on the back of recent comments that interim managers take home more than the prime minister.

Both claims are unfounded. Interim managers are senior, experienced and can turn their hand to a wide range of tasks. They work from within a customer organisation to identify ways to strengthen that organisation's capabilities and ensure the organisation has the capacity to continue to deliver results once they have left. They have an exit plan from day one and are looking for or already know their successor.

That is a contrast to consultants, who are an outside resource, hiring out knowledge and expertise to a client to achieve outcomes.

As for the claim that interim managers earn more than the prime minister, interims are small businesses compared with consultancies, who may have hundreds or thousands of staff, expensive offices to maintain, and big marketing budgets.

Interim managers may be paid up to £500 a day, but that is not a salary. That is gross revenue, which goes to a limited company. Holidays are unpaid, health insurance is unpaid, sick days are unpaid, time between assignments is unpaid.

Most interim managers have to pay their own businesses expenses, including national insurance, indemnity insurance, travel and accommodation costs and other costs, such as personal computing equipment, mobile phones and broadband connections.

Most interims work away from home, travelling on a Sunday evening and back on a Friday evening. My most recent assignments have involved journeys of between three hours and five and a half hours - all unpaid time out of the weekend. Accommodation is required and customers rarely pick up the tab. Iver and above this you have subsistance costs, you need to eat and keep fit.

An assignment may last six months - following which, an interim manager might not work again for another four months, so it is unclear how long a manager needs to make their money last.

A six-month contract would comprise a maximum of 120 days of paid work. That is a gross revenue of £60,000, which may sound a lot, but the costs involved could add up to more than £28,000, leaving under £32,000. That has to cover not just managers' pay, but also essential continuing professional development and professional accreditation.

The reality is that interim managers work, on average, 10-hour days. If the salary is £32,000, that equates to £26.67 an hour. A prime minister may earn £150,000, but add in holidays, pension, cars and expenses and they are still looking at a package of more than £180,000, even with the new constraints.

A professional, accredited interim manager lives and breathes for the customer while on assignment. They analyse, design, build, train, roll out and evaluate major changes for the customer and transfer skills into the organisation so they will not need to come back.

Unlike consultants, interim managers see the job through until it is done or until the customer is confident of its capacity to manage without external help.